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ROM or Hard Estimate which one come first?

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Cesar Fiestas Technical Project Leader| Intuitive Projects Newport Beach, Ca, United States
There seems to be a confusion on which come come first a ROM or a hard estimate before a project starts, as both seem to be redundant.
I know a ROM has a low level of accuracy, and an estimate have or is supposed to have a high level of accuracy. But if you have a client ready to do business with you, wouldnt you want to give him an estimate rather than a ROM, to avoid surprises at the beging or at the end of the project?
Otherwise the flow is
ROM-Estimate-Approval-Work Begins
Is like an extra unnessesary step....
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Cesar Fiestas Technical Project Leader| Intuitive Projects Newport Beach, Ca, United States
Jan 17, 2020 3:10 PM
Replying to Rami Kaibni
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Cesar

In many cases, it is difficult to give a an accurate estimate at the outset of the project especially when there is no information available.

In Construction, we use ROM's to give a high level indication (Ball Park) for the budget. For example, if a client asks:

How much do you think it would cost to build X-Building ? We go back to our data base, see what was the cost per Square Foot for building a similar building and advise the client accordingly. This estimate provided to very + or - 35% as more in know, requirements are clear, and design drawings are underway.

In summary, yes, we do make ROM's estimates then this is followed by Class D estimates, Class C, B, and the most refined and accurate one which is Class A which will be used in the contract with the client.

Hope this makes sense.

RK
Rami,

Thank you for taking the time to respond to my question, is it customary to use estimates classes a to d in the construction business? also you mentioned that you guys check into your database for more information, is this database or software a custom made software of some kind? or is it in house?. Thanks for your time Sir
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1 reply by Rami Kaibni
Jan 17, 2020 8:52 PM
Rami Kaibni
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Cesar

In construction, mostly yes but you don't need to do them all. We normally almost always do Class D which is a preliminary budget then Class A which is based of f the design drawings.

The data base is in-house based on our previous experience or we can look at industry norms. There are lots of cost reports issued by reputable organizations.

Hope this helps.

RK
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Sergio Luis Conte Helping to create solutions for everyone| Worldwide based Organizations Buenos Aires, Argentina
Jan 17, 2020 3:51 PM
Replying to Cesar Fiestas
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Sergio,

Very interesting, let me read more abut the cone perhaps i am not seeing the entire picture. Thanks again
No problem. I face the same than you and the cone helped me a lot BUT you have to make your work to help people to accept what they so not like to hear. If not a risk has to be rised and assigned it to them. There are a lot of work outiside there which demostrate that projets always end in the estimated time but it is not the published time. Thats the point.
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Kiron Bondale Retired | Mentor| Retired Welland, Ontario, Canada
Cesar -

I would love to see #NoEstimates as the default before a team has a chance to do "some" exploration of project scope and delivery approach, but till then, ROMs are an unfortunate reality. At least if we have good historical data and can use an analogous estimate they may have some semblance on reality, but as project complexity increases, the range on a ROM can go as high as +200-400% which makes it completely meaningless.

Kiron
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Rami Kaibni
Community Champion
Senior Projects Manager | Field & Marten Associates New Westminster, British Columbia, Canada
Jan 17, 2020 4:04 PM
Replying to Cesar Fiestas
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Rami,

Thank you for taking the time to respond to my question, is it customary to use estimates classes a to d in the construction business? also you mentioned that you guys check into your database for more information, is this database or software a custom made software of some kind? or is it in house?. Thanks for your time Sir
Cesar

In construction, mostly yes but you don't need to do them all. We normally almost always do Class D which is a preliminary budget then Class A which is based of f the design drawings.

The data base is in-house based on our previous experience or we can look at industry norms. There are lots of cost reports issued by reputable organizations.

Hope this helps.

RK
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Thomas Walenta Global Project Economy Expert Hackenheim, Germany
ROM comes before an estimate that is more accurate.

ROM is easier to state, more risky. It is often used to prioritize projects (where even a relative size would be sufficient). It is not suitable for setting a project budget or calculating ROI.

A project manager might want to avoid ROM estimates, a portfolio manager needs them. Often ROMs are established by analogous estimates or Delphi method asking several experts repeatably (planning poker in agile is an example of it).
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